Hong Kong Inflation June 2018

Hong Kong: Inflation picks up again in June

July 23, 2018

Inflation picked up to 2.4% in June, from 2.1% in May. However, when accounting for the effects of one-off government relief measures, inflation reached 2.7%. The acceleration was largely due to higher price increases for food; private housing rent; transport; and electricity, gas and water.

For the April–June period, the average of the month-on-month variations in consumer prices was 0.1% in seasonally-adjusted terms, equaling the increase seen in the three months up to April. Meanwhile, annual average inflation remained stable at May’s 2.0% in June.

A government spokesperson noted that:

“Looking forward, inflationary pressure is expected to intensify slightly in the near term compared to the situation in the first half of the year, reflecting higher global inflation and continued feed-through of earlier rises in fresh-letting residential rentals. Nonetheless, inflation should stay within a moderate range for 2018 as a whole.”

FocusEconomics Consensus Forecast panelists expect inflation to average 2.2% in 2018, which is down 0.1 percentage points from last month’s forecast. For 2019, the panel expects inflation to average 2.3%.

The Nikkei Hong Kong Purchasing Managers’ Index (PMI), which is released by IHS Markit, inched up to 48.2 in July from 47.7 in June, remaining below the 50-point threshold that separates expansion from contraction in the private sector.

The Nikkei Hong Kong Purchasing Managers’ Index (PMI), which is released by IHS Markit, fell for the fourth consecutive month in June, inching down to 47.7 from 47.8 in May and moving further below the 50-point threshold that separates expansion from contraction in the private sector.

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